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Wisconsin Group Works With Banks to Address Symptoms of Foreclosure
Learn more about community organization Common Ground's unconventional approach to foreclosure relief that has large banks helping with Milwaukee-area revitalization efforts.
July 30, 2011 /Government PR News/ -- American homeowners have recently faced some of the toughest economic challenges in our nation's history. Due in part to the stagnant economy, home foreclosure rates have remained disturbingly high for nearly half a decade.
Many lay the blame at the foot of banks and other mortgage providers. Many such organizations exercised bad practices that at the very least exacerbated the problem, and hundreds of lawsuits have been filed against lending institutions.
One group, however, is taking a very different approach. Southeastern Wisconsin-based Common Ground has been confronting banks directly, asking them to step up and take responsibility for their hand in the foreclosure nightmare sweeping the state. Common Ground's persistent efforts have already garnered huge benefits for Milwaukee residents.
What Is Common Ground?
Common Ground started small back in 2008. Organized as a coalition of religious congregations, businesses, schools, unions, neighborhood groups and non-profits, Common Ground has been working to face social issues in southeastern Wisconsin since its inception.
Today, Common Ground has over 50 member organizations, representing a support base of more than 40,000 people. The group operates in Milwaukee, Waukesha, Ozaukee and Washington Counties.
Setting Their Sights on Foreclosure
Common Ground is dedicated to addressing a wide range of community issues, from affordable health care to the creation of youth jobs. So how did they wind up in negotiations with some of America and the world's most powerful mortgage providers?
Between 2007 and 2009, some 15,000 foreclosure petitions were filed in the City of Milwaukee alone, making it one of the hardest hit areas in the country. Thousands of families were forced to make new living arrangements, and empty or abandoned houses, valued at prices too modest for large banks to bother with upkeep, increasingly became hotbeds of criminal activity and neglect.
Common Ground saw a growing problem. And where did they turn for help? Those they saw as responsible: the banks that now owned foreclosed homes.
Common Ground launched a massive campaign, specifically targeting three major lending institutions that owned over 4,000 of the homes foreclosed on in southeastern Wisconsin in 2009: Deutsche Bank, U.S. Bank and Wells Fargo. Their strategy? Ask the banks to help clean up the mess they created.
At the outset, bank officials were not receptive. But common ground would not take "no" for an answer. In May, Common Ground members traveled to San Francisco to attend the Wells Fargo shareholders meeting, and successfully convinced the bank to pledge $2.4 million. The money will be used to help repair foreclosed houses, and to offer sustainable mortgages to responsible buyers in the Milwaukee area.
Another victory came in June, when Deutsche Bank committed $2.4 million of their own to the project since dubbed "Milwaukee Rising." Common Ground had been in negotiations with Deutsche Bank since traveling all the way to Germany for their May shareholding meeting.
Common Ground is now asking JP Morgan Chase, Bank of America and U.S. Bank to follow Wells Fargo and Deutsche Bank's example and make similar contribution pledges. Common Ground hopes to collect a funding pool of approximately $12 million. This money could have a significant revitalizing effect when paired with federal funds provided through the city of Milwaukee. All five banks have already promised to meet with Common Ground and city officials to explore avenues for taking better care of foreclosed homes.
Making a Difference
In 2007, Deutsche Bank was slapped with a federal lawsuit for being unable to produce documents proving that it owned mortgages in 14 foreclosure cases. While this legal action was highly publicized and resulted in the vindication of a few individual homeowners' rights, it did relatively little to change the way the bank handled mortgages or foreclosures.
Common Ground's grassroots negotiation tactics, on the other hand, have the potential to do just that. For the first time since the foreclosure crisis began, banks are beginning to voluntarily take responsibility for contributing to community decay through sloppy lending practices. There is no doubt that the Milwaukee Rising initiative represents quite an accomplishment for a relatively small, local organization dealing with some of the biggest corporate giants on the planet.
Is a legal action sometimes appropriate and necessary to achieve a successful outcome? Of course. But, Common Ground's success proves that sometimes compromise and collaboration pay off, even if it takes a little persistence. Every so often, companies and the people that run them can be convinced to come forward and do the right thing.
Article provided by Debt Advisors, S.C.
Visit us at www.mydebtadvisors.com
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